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http://www.wsba.org/media/publications/barnews/2004/dec-04-fucile.htm Alternative Fee Arrangements: How Long Do the RPCs Apply? by Mark J. Fucile. “Alternative fee arrangements” have become increasingly popular in recent years among both lawyers and clients. They range from variants on traditional hourly or contingent fees to taking stock or other business interests in lieu of fees. Although the “dot-com bust” cooled the ardor for stock as a compensation tool, alternative fee arrangements are still being expanded into a wide variety of practice settings. If you’re using — or thinking about using — alternative fee arrangements, the Washington Court of Appeals recently issued an opinion that may have far-reaching consequences. The Court of Appeals in Holmes v. Loveless, 122 Wn. App. 470, 94 P.3d 338 (2004), held that the requirement in the Rules of Professional Conduct (RPCs) that a lawyer’s fee be “reasonable” extends over the life of the fee agreement involved. Holmes arose under unusual circumstances. The plaintiffs were two retired partners of a law firm. The defendant was a real estate developer. The lawyers and their firm had entered into a fee agreement with the developer in 1972 to provide legal services during the start-up phase of a project. Under the agreement, the law firm heavily discounted its fees (charging no more than necessary to cover its overhead) during a two-year start-up period. After that initial period, the law firm’s fees moved back to its regular rates. In return, the law firm was to receive five percent of any cash distributions generated by the project. The project turned out to be very successful, and over the next 30 years generated $380,000 for the firm. Full Article: http://www.wsba.org/media/publications/barnews/2004/dec-04-fucile.htm |
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2006 Ethics-Governance.com |
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